Correlation Between Nationwide Amundi and Wilmington Trust
Can any of the company-specific risk be diversified away by investing in both Nationwide Amundi and Wilmington Trust at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nationwide Amundi and Wilmington Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Amundi Strategic and Wilmington Trust Retirement, you can compare the effects of market volatilities on Nationwide Amundi and Wilmington Trust and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nationwide Amundi with a short position of Wilmington Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Amundi and Wilmington Trust.
Diversification Opportunities for Nationwide Amundi and Wilmington Trust
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nationwide and Wilmington is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Amundi Strategic and Wilmington Trust Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Trust Ret and Nationwide Amundi is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nationwide Amundi Strategic are associated (or correlated) with Wilmington Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Trust Ret has no effect on the direction of Nationwide Amundi i.e., Nationwide Amundi and Wilmington Trust go up and down completely randomly.
Pair Corralation between Nationwide Amundi and Wilmington Trust
Assuming the 90 days horizon Nationwide Amundi is expected to generate 1.7 times less return on investment than Wilmington Trust. But when comparing it to its historical volatility, Nationwide Amundi Strategic is 14.85 times less risky than Wilmington Trust. It trades about 0.44 of its potential returns per unit of risk. Wilmington Trust Retirement is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 34,087 in Wilmington Trust Retirement on September 13, 2024 and sell it today you would earn a total of 268.00 from holding Wilmington Trust Retirement or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Amundi Strategic vs. Wilmington Trust Retirement
Performance |
| Timeline |
| Nationwide Amundi |
| Wilmington Trust Ret |
Nationwide Amundi and Wilmington Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Amundi and Wilmington Trust
The main advantage of trading using opposite Nationwide Amundi and Wilmington Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Amundi position performs unexpectedly, Wilmington Trust can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wilmington Trust will offset losses from the drop in Wilmington Trust's long position.The idea behind Nationwide Amundi Strategic and Wilmington Trust Retirement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Wilmington Trust vs. Vanguard Total Stock | Wilmington Trust vs. Vanguard 500 Index | Wilmington Trust vs. Vanguard Total Stock | Wilmington Trust vs. Vanguard Total Stock |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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